This is my update for Friday, January 29th. First thing, let’s get into the stimulus, Democrats are staying pretty firm on their $1.9 trillion dollar topline.
As I said yesterday, they might be willing to budge on some of the specifics, for example the income limits on stimulus checks, but overall they like what they have and obviously the Republicans don’t have much power to push back on the provisions they’re skeptical of.
Of course it will depend on the Senate parliamentarian as to what Democrats would be permitted to pass through reconciliation on their own, but I wouldn’t surprised if Democrats did go their own way here, they push through something well over a trillion dollars through reconciliation.
Jen Psaki, the press secretary for the Biden administration, said today that the White House does not want to break the stimulus apart into separate measures, they want to keep it together, but that the “size and the scope” of the bill could change slightly through the legislative process. So the only remaining question is whether they reach across the aisle to pass this with the support of both parties, or if they use budget reconciliation to get around the filibuster and pass their stimulus with a simple majority.
The next step for the Biden administration is putting pressure on lawmakers, figuring out who they can get onboard, if there are any Democrats who would balk at the current plan or the idea of reconciliation, and also if there are any Republicans who would consider working with them on a bipartisan bill if they don’t want to push stimulus through reconciliation. Remember, you only need 60 votes to end a filibuster, which means that you could get a bipartisan stimulus with just ten centrist Republicans.
President Biden emphasized that urgency today in a meeting with Janet Yellen when he said that “we have learned from past crises that the risk is not doing too much, the risk is not doing enough.” Jen Psaki, hinted at the administration’s plans for promoting this by saying that they’re “taking a number of creative steps, a little outside of the box.
Certainly, his [Biden’s] preference would be to get on a plane and fly around the country.” And how’s this for a creative step, Vice President Harris gave a TV interview with a local news station in West Virginia where she talked about the urgency of the stimulus and what it would mean for families who are struggling.
If you’re wondering why West Virginia is so important, remember that this is a very red state, Trump won the 2020 election there by almost 40 points. So even though West Virginia has one Democratic Senator, that’s Joe Manchin, he’s closer to the center than almost any other Democrat in the Senate. Obviously there’s a lot of pressure for him to avoid going too far left given that he’s running as a Democrat in a Republican state, and he only won his 2018 Senate election by around three points, so he doesn’t have a lot of room to maneuver here if he wants to keep his seat. Harris did something similar in Arizona, home of Kyrsten Sinema, another moderate Democratic Senator who could end up being an obstacle for the $1.9 trillion plan.
She said in the Arizona interview, “if we don’t pass this bill, I’m going to be very candid with you: We know more people are going to die in our country. More people will lose their jobs and our children are going to miss more school. We’ve got to be here collectively to say that that is not an option in America.” This is a little unusual, a Vice President getting TV spots in key states in order to put pressure on members of her own party. But obviously if she can convince these constituents that the stimulus is a good idea then it’s going to be tough for Manchin and Sinema to explain why they don’t want to move forward with this.
Let’s talk briefly about the situation with Gamestop, Robinhood, Melvin Capital, Wall Street Bets, and all the other players involved here because this been changing every day, I was thinking of doing a standalone video today, but I’m sure you’ve all seen the news right, Robinhood just started looking for an in-house lobbyist in advance of the inevitable scrutiny that they’ll be under in the coming days and weeks.
Because as you know, Gamestop stock has been going up as a result of it, let’s face it, being over-shorted and some smart traders taking advantage of that, and Robinhood and some other investment apps responded by yesterday preventing users from buying any more shares.
So you could still sell your shares, you could still cash out at any time, but you weren’t allowed to get any new ones. And right after that they received around $1 billion in funding from their investors to help them with cash flow. Since then Robinhood pivoted to letting people buy up to five shares, but now users are limited to only one share and five options contracts, so that’s a pretty significant restriction, and I’m not sure how they will come out on the other side of this one, I don’t know what will happen to them from a regulatory perspective, but they’ve just completely, completely alienated their user base with users feeling the app for greener, freer pastures at brokerages like Fidelity. And we’ve already seen everyone from AOC and Rashida Tlaib to Ben Shapiro and Ted Cruz come out against Robinhood, and well when you can get all of those people on the same side of an issue then whoever’s on the other side is in trouble.